Edited by Léo-Paul Dana
Chapter 35: Internationalizing European IPOs in the United States
Boyd D. Cohen Initial public oﬀerings (IPOs) have become a fertile ground of research for entrepreneurship scholars in recent years.* At the same time, there is a growing interest among entrepreneurship scholars in the intersection between entrepreneurship and international business. This study seeks to link these two emerging research themes by examining Europe-based ﬁrms’ IPOs in the USA. The intuitive beneﬁt of launching an IPO in the USA is that the ﬁrms are seeking to tap into the large capital base in the USA and gain access to US markets. However, this study found that, following a US IPO, European ﬁrms gained legitimacy and increased their internationalization eﬀorts, with much of the growth in European markets. During the 1990s we observed a signiﬁcant transition from domestic and regional commerce to one of global trade, where traditional boundaries to cross-border economic activity have declined rapidly. The most common explanation for this shift towards a global economy was the pace of technological change which, among other things, signiﬁcantly reduced prior communication barriers. Entrepreneurs have been among the most aﬀected (both positively and negatively) by the increasing globalization of commerce. This has coincided with a heightened interest in international entrepreneurship research which, until 1989, was non-existent. Now, only a decade later, it is considered one of the most rapidly growing and important areas of research for entrepreneurship and international business scholars (Wright and Ricks, 1994, p. 699). The generally agreed upon deﬁnition of international entrepreneurship applied...
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